Leverage in investing in high-end nursing homes

The trend of population aging and the increasing number of rich and super-rich people in Vietnam are the main levers for investment in building high-end nursing home real estate projects.

The investment market for high-end nursing homes and nursing homes in Vietnam is starting to see some “names” with the role of market makers. In the photo: Vinmec Medical Resort nursing home model developed by Vinhomes.

Opportunities from the super rich group

Sitting on a park bench after a weekend cycling session, Mr. Tran Long and some of his neighbors in the Bang Lang subdivision in the Vinhomes Riverside urban area (Long Bien district, Hanoi ) calculated that they would retire in more than 3 years. However, he had prepared everything to enjoy a leisurely life in his old age with his wife and two daughters who are living in Japan. He is planning to move to Japan to settle down with his children.

Accordingly, the other port city Fukuoka in Fukuoka City on Kyushu Island (Japan) was chosen by the couple. Partly because this place attracts many foreigners to study and live. Many nearby universities are implementing exchange programs with international students, which is very convenient for his two daughters who are working in theeducation field. In addition, this area, also known as “Hakata”, is famous for its onsen (hot springs), delicious food and many tourist attractions, such as Dazaifu Tenmangu Shrine, Canal City Hakata and Itoshima.

“I decided that after retirement I will live in Japan,” Mr. Long shared with his friends.

Meanwhile, Ms. Hang, a secretive businesswoman in Ho Chi Minh City, spent millions of dollars renting a two-bedroom apartment in Singapore for five years to receive medical treatment. She decided to go to Singapore for treatment after discovering she had esophageal cancer.

According to the Wealth Report of Knight Frank Company, the number of super-rich people in Vietnam (owning assets worth 30 million USD or more) increased by 82% in just 5 years, from 583 people in 2017, to 1,059 people by the end of 2022.

The number of rich people with assets from 1 million USD to under 30 million USD in Vietnam also increased by 70% in the past 5 years and is expected to skyrocket by 173% in just 10 years, from 2017 to 2027.

“This is more than a resort,” Ms. Hang commented after visiting the model home at the nursing home facility in Singapore. Some of the outstanding amenities here include an indoor swimming pool, yoga room, 24/7 care services, etc.

People like Mr. Long and Ms. Hang are among the customers that investors are targeting - wealthy, progressive and looking for joy in their twilight years.

“Our purpose is not just to spend money to buy an apartment, but to find a more interesting life,” Ms. Hang shared.

The above mentioned models of nursing homes and high-end nursing homes are becoming increasingly attractive investment destinations for investors in Southeast Asia, including Vietnam. More and more money is pouring into this sector, in the context of an aging population and an increasing number of super-rich people.

However, the reality of rich people having to go abroad for treatment shows a gap in luxury medical services in Vietnam and many investors are starting to seize opportunities from this potential segment.

One of them is real estate service developer Vinhomes (part of Vingroup Corporation). Vinhomes has just decided to invest in a nursing hospital model.

Vinmec Medical Resort aims to exploit the potential of this service in the Northern region.

According to the investor's introduction, within the plan to complete the utility system of Vinhomes Ocean Park 2 phase 2024 - 2025,

Vinmec Medical Resort is a 5-star high-end nursing home, the most anticipated healthcare facility for residents. Not only is it home to a team of highly skilled and experienced doctors, it is also expected to bring healthcare experiences to Vinhomes residents, with unique service standards, unprecedented in Vietnam.

Designed in a classic, luxurious style, the distinct highlight of

Vinmec Medical Resort comes from 18 presidential villas - super luxury nursing rooms for patients. At the same time, the harmony between green vegetation and water utilities also makes private space an advantage of these special nursing rooms, helping patients recover mentally and physically quickly.

Besides Vinhomes, we must also mention the Japanese investor - Mikazuki Group. Earlier this year, during a meeting with the leaders of Da Nang City, Mr. Yoshimune Odaka, Chairman of Mikazuki Group proposed investing in a number of projects in the city. In particular, Mikazuki plans to cooperate with a Japanese hospital to invest in an additional resort block in the parking area of ​​the Mikazuki Hotel operating in Da Nang, combined with a health screening function. The investment scale of a resort block is about 150 rooms with a total investment of 30 - 50 million USD.

This investment proposal not only enhances the value of Mikazuki Hotel, but also fits the orientation of the coastal city of Da Nang - developing resort tourism combined with health care.

The Japanese hospital will bring modern medical equipment to Mikazuki Hotel to screen people in need and will directly send patients to Japan for treatment, especially cancer patients.

It can be said that the Japanese nursing home model is quite popular with investors. In Hanoi, there is currently the Asahi Oriental Nursing Home Project, the investor is Oriental Medical Complex Company Limited.

Started in July 2022, Phuong Dong Asahi has created a big "boost" for the high-end resort and nursing home market in Hanoi - a place that is "thirsty" for a comprehensive healthcare model for the elderly. Phuong Dong Asahi is designed with amenities, classy space combined with many comprehensive healthcare facilities according to Japanese nursing home models and many privileges never seen before in nursing homes in Vietnam.

This project has a total investment of 800 billion VND, a scale of 7,000 m2 located on a 10-hectare campus of Phuong Dong Medical Complex (No. 9, Pho Vien, Co Nhue 2 Ward, Bac Tu Liem District, Hanoi), expected to welcome the first guests in 2024.

Designed in a modern style and managed and operated by Tsubasa Group (Japan), Phuong Dong Asahi provides a variety of services including: inpatient care for the elderly who need long-term accommodation or the elderly with underlying or serious illnesses; semi-boarding care for busy families or the elderly who want to experience international-class resort and nursing services.

According to analysts, the value of the Oriental Asahi Nursing Home, in addition to providing health care for the elderly according to strict Japanese standards, is also a place to train nurses to meet Japanese standards to supply human resources for the labor export market and to accept those who have expired their nursing work term in Japan back to work.

Leverage from the aging population trend

It can be said that the investment market for high-end nursing homes and nursing homes in Vietnam has not yet entered a rapid growth phase, but some "names" have begun to appear to create the market.

Real estate developers have sought to partner with healthcare facilities to develop this model. Although many investors have not yet made a profit from the nursing home business, they believe that the demand for these facilities will increase and changes in Eastern social concepts will bring profits in the long term.

On the policy front, Vietnam is developing a detailed plan to promote the development of the healthcare sector for the elderly, focusing on expanding basic services at affordable prices. One of the goals of this plan is to increase the number of beds in nursing homes and invest resources in training human resources.

Demographic changes are also breaking down long-standing traditional barriers that have hindered the popularity of nursing homes in Vietnam.

According to data from the General Department of Population (Ministry of Health), the proportion of the population over 60 years old in Vietnam in 2022 is 12% and by 2050 it is 28%. Meanwhile,

It took Australia 72 years, while Vietnam took 16 years to move from an aging country to an aging country (the proportion of the population over 65 years old is increasing).

The demand for nursing home-related services – which provide health care services for the elderly – is increasing, but in Vietnam, this market is still in its infancy. Although the target is to have at least one nursing home in each province and city by 2025, it is still not enough to keep up with and meet the aging population in Vietnam.

Investors estimate that the current occupancy rate at private nursing homes, mainly located in economically developed areas, is only about 37-40%, much lower than the 85% needed to break even. Factors that make customers hesitant include high costs (due to increasing land prices and high investment capital costs).

However, the aging population trend is one of the levers for the development of nursing homes and nursing homes serving the super-rich.

Savills Vietnam representative said that in the Vietnamese market, there are many levers to support the construction of nursing homes specifically for the elderly, especially the insurance packages that come with investment value that are becoming more and more popular. From the perspective of facility management, it is currently very difficult to have a team of staff trained in specialized healthcare. In the future, the traditional family model will certainly gradually change and the next decade will witness many opportunities for the nursing home segment. In that context, investors are forced to invest long-term.

Source: https://baodautu.vn/batdongsan/don-bay-trong-dau-tu-khu-duong-lao-cao-cap-d211351.html